Bitcoin Price: Market Update 30 March 2020

Over the last 24 hours, we have witnessed Bitcoin hitting just shy of Target 2 (USD 5820) referred to in the “Will Bitcoin Price reclaim the psychological USD 7k level?” article I posted on February 24th, 2020, reaching USD 5860.

As anticipated, buyers have stepped in and we now see Bitcoin, at the time of writing, at USD 6237, a decent USD 400 bounce. Is this bounce in the Bitcoin Price sustainable or is this just another trap? Let’s dig a little deeper…

Indicators at the time of writing:

  • Bitcoin Price: USD 6237
  • Open Interest: USD 603 million
  • Bitcoin Dominance: 65.51%
  • Patterns: Broadening Ascending Wedge/Channel on 12 Hour Chart
  • Resistance 1: USD 6548
  • Resistance 2: USD 6808
  • Major Resistance: USD 7304
  • Major Support/Pivot: USD 5820
  • Moving Averages: 2 Day Death cross on EMAs, Potential close below monthly 21EMA looming; Weekly above 200EMA/SMA
  • Momentum Oscillators: BEARISH
  • Short Term: NEUTRAL-BULLISH
  • Medium-Term Outlook): BEARISH
  • Long Term: BEARISH
  • Macro: BULLISH

Bitcoin Weekly Close

There are two ways to look at the weekly close:

1. The Bulls managed to achieve the first open and close above both the weekly 200EMA and 200SMA.

This is a significant positive step in the right direction if you want to see a legitimate reversal in price. If we look back at the history of Bitcoin Price, it has generally held the 200EMA/SMA. If these moving averages are lost and then regained, it often signals that buyers are stepping back into the market. History doesn’t always necessarily repeat itself, but as the saying goes – “it often rhymes”,

OR

2. the candle formed on weekly close resembles a “Shooting Star”. (albeit on low volume)

 

Visibly there is a long wick to the upside, signifying that price was pushed down by sellers and it closed well below the highs of the week. This is the second week in a row that we see the market movers sell between USD 6800 and USD 7000 – closing long and filling short positions simultaneously in this highly liquid zone. For now, this may indicate that Bears are still in control of the market. However, a revisit to that area will likely not result in the same markdown, as with every attempt at breaking through a price level weakens that resistance (likewise for support).

Where will the Momentum take us?

It may be useful to look at our Momentum Oscillators, namely the Stochastic and RSI (Relative Strength Index). We should look from the 12-hour right up to the Monthly time-frame, to see if we have agreement amongst them on a possible direction in price:

  • 12-Hour
    RSI: Pointed up and testing the neutral zone, the potential for bullish action but also could be etching out a future head and shoulders pattern.
    Stochastic: Sharply angled down, testing the bearish zone.
  • 24-Hour
    RSI: Venturing above the EMA, the potential to close above today, a potential inverse head and shoulders forming could be a sign of reversal.
    Stochastic: Fresh Cross to the downside, bearish.
  • 2-Day
    RSI: Above the EMA but still within the confines of the bearish zone.
    Stochastic: Angled up, could be losing momentum.
  • 3-Day
    RSI: Rejected off the EMA.
    Stochastic: Angled up and looking positive.
  • Weekly
    RSI: In the grip of the bearish zone, testing the EMA.
    Stochastic: Aggressively angled down.
  • Monthly
    RSI: Testing the edge of the bearish zone.
    Stochastic: Angled down.

The momentum appears to be more to the downside than upside. This does not, however, necessarily mean that we cannot have short bursts up to test critical areas of resistance, that could lead to these oscillators turning around.  The above only gives us a little insight on what the possible direction of momentum could be. Nothing is certain, only a game of probabilities.

The Wild Card

The sentiments of the market are generally reflected in the charts, however, there are other tools that traders and commentators factor into their decision-making models. One of them is the sentiment indicator known as the Crypto Fear and Greed index.

The maximum Greed is marked as being 100 and the maximum Fear is marked as 0. Right now, the index is posting a 10, which is very low. Historically speaking, whenever there is a sustained low reading (Fear), or a sustained high reading (Greed) we tend to get a counter move.

For example, if we sit at extreme Fear for a sustained amount of time, we tend to see a market reaction, and price gets marked up. The market has a way of re-balancing. Whenever too many people are on one side, it shifts. Although this is not something that you can bank on, it is more often than not, a good indication that things may turn.  Whether that is short-lived or sustained, is undetermined.

Quarterly Close

As we approach the end of March, we not only have the monthly close to look forward to, but also the quarterly close (3-Month chart). As it stands, one can see a healthy bounce off the 3-Month 21EMA. Historically this has never been breached on a closing basis in Bitcoin history (although Bitcoin’s age doesn’t offer enough price history it still applies).

Although the first month or two of the next quarter, could turn out to be down months, there is still potential for the quarterly close to be on a high, come December 2020. If there is anything to be Bullish about, I would pin my tail on this.

By Wes Carlson – Chief Operating Officer of CryptoFish – 30 March 2020

Disclaimer: This is not investment advice. It is produced merely for discussion and educational purposes. Please do your own research. I am using BitMEX Exchange for charts and Price Data, please adjust accordingly for your exchange of choice.

You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.

CryptoFish will use the information you provide on this form to be in touch with you and to provide updates and marketing.